u2.com membership & iPod tie-up: smart business moves for U2

[jick]

As I have said many times, U2 are perhaps as good as a profit-making corporation as they are in making music. Here is an example:

http://www.u2world.com/news/article.php3?id_article=20013

http://www.u2world.com/news/article.php3?id_article=19244

It may only be a small portion, but the U2.com membership is a brilliant move on U2's part. Let's just say 100,000 people sign up for U2.com, which is a very conservative estimate considering they can get a 60,000 audience in most major cities in the world in any given show, then U2 get an easy 4 million in gross income from their website. I'm not even factoring the hundreds whose credit cards were double charged, or even the non-U2 fans who are just professional scalpers who might see membership at U2.com as an investment.

Since membership does not have that many benefits except for getting tour tickets we can expect virtually all of them to buy tickets. I think it was intentionally designed to have few benefits except for the tour bookings so that the members would be forced to buy tickets just to get their money's worth in website membership. Since there is a 2 ticket/ 1 show limit in America, and 4 ticket / 1 show limit in Europe, let's average it to 3 tickets per person since u2.com members cover both continets. So that is 300,000 tickets at $50 each (which is a conservative estimate since single ticket prices can be priced as high as $150 but I just pegged it at the minimum). So that should be at least 15 million in guaranteed revenue from ticket sales. So whether their tour tanks or not, they are assured at the very least $15 million in purchased tickets through website membership.

There are expenses to incur like the webspace, domain name, and site moderators/managers/updaters - but these expenses should not be much compared to the very conservative 4 million gross profit they should make from u2.com membership. Add that up to the minimum 15 million guaranteed ticket sales then U2 stand to make 19 million from the website alone.

U2's tie-up with Apple was also another genius of a business move. All they said was that no money changed hands which is actualy more scary with the following implications: First, U2 got free advertising as Apple paid for all the TV ads. Second, U2's album sales were boosted by the exposure and if you look at the article I linked above - they make 28% in royalties. Third, U2 hinted that they will get royalties from iPod sales - if it is U2-only iPods then that may not be that much but still considerable enough since U2's going rate is 28% and the iPod sells for $349 so they get a whopping $98 from every U2 iPod sold! Fourth, knowing what corporate monsters and shrewd businessmen U2 are, they have probably brokered deals that could let one of their umbrella corporations get equity in Apple or exclusive dealership in Ireland. Also, considering the popularity of the iPod, U2 may have also engineered a one-year "exclusve lockout deal" that would prevent other musical artists to have their own themed iPods before a year since U2's iPod release expires. So despite the innocent statement that "no money exchanged hands", it looks like U2 have gotten the better end of the deal and are milking Steve Jobs dry.

There is no doubt as to how big a money making machine U2 is. But what really impresses me is that they know how to spend their money. They spend a lot of it on marketing. They control the media, the critics, and the reviews. They even virtually call the shots at their record label - somehow getting Eminem to release his album early so that U2 could hog the spotlight all to themselves. Not to mention how many Grammies they have "purchased" during the ATYCLB era, and their marketing pitch to the Superbowl execs to bag them the halftime show. U2 are the only brilliant bands who see their music as an investment - few bands ever use their profits to invest in marketing, image-branding, publicity stunts, and other high-profile activities to increase awareness and sales.

I am nothing but praise for U2 because they have gone beyond simple the artistic and musical side. They also treat their craft as a business and have done well in raking in the profits. They are quick to ride the latest trends and technology to make more money through outlets like their website membership and Apple tie ups.

When their career is over, I can imagine the band receiving honorary business degrees from top universities in Ireland and the UK.

Cheers,

J

 

[Headache in a Suitcase]

emineim's album was released early because of it was leaked early to the internet... they did the exact same thing with em's last album, when there was no u2 album comming out. this happens a lot with rap albums, and, as usuall, you should check your facts first before making accusations about u2.

#2... i don't think steve jobs has to worry about being milked dry any time soon.

#3... i love how once again you manage to spin an entire negative paragraph, where you lay out some pretty low accusations about buying off critics and buying grammys, into something positive. bravo djick... bravo indeed.

cheers,

H

 

[ponkine]

To be honest my friends, I don´t know how the hell a U2 fan must be proud of all that marketing machine that became U2 a sell out band

I mean, the spirit of the old ( now dead ) U2 was something to be proud of: the Truth, the human rights, the end of poverty, justice, world care, etc, etc
is there something from all that in those awful commercial moves ?

 

[Lancemc]

I love how so many people to try equate making money to not caring about anything anymore. Just because U2 have finally realized there's plenty of money to be made, doesn't mean they stand for any less than they ever did. If anything, having more money makes them even more powerful to fight for, as you stated, "human rights, end of poverty, justice, world care, etc, etc"

 

[Headache in a Suitcase]

yea... you're all right. u2 are sell outs. bono really doesn't give a shit about anything but money anymore... yea... that's why it took 5 fricken years for a new album, 'cause bono was traveling all over the world "not giving a shit"

[/sarcasm]

 

[Lancemc]

ponkine just thinks that everytime he puts " " after the word sell-out it somehow gives him credibility.

 

[Flying FuManchu]

I believe Paul McGuinness (sp) should get some of the credit as well, if not most of the credit.

Although the potential $4,000,000 from the U2.com membership drive is a lot of money in our eyes, in actuality, it is not enough to maintain a website like U2.com on a daily basis. Web maintenance, new content, and bandwidth will eat up that money within months. It's real expensive to run a quality website like U2.com.

 

[Flying FuManchu]

I also wonder about the U2's future marketing plans? The IPOD thing was pretty close to brilliant but can they top a promotion like that without getting burned or seemingly "repeating themselves" considering the older they get, the more ageist the media gets toward "older" rock acts. When Moby had his songs in commercials the first few times around, it was an interesting promotion but as time went on it sort of got old.

 

[sallycinnamon78]

To be honest my friends, I don´t know how the hell a U2 fan must be proud of all that marketing machine that became U2 a sell out band

The word 'became' is in the wrong context there - 'made' would be better. (I'm not trying to be rude to you , just pointing this out).

I mean, the spirit of the old ( now dead ) U2 was something to be proud of: the Truth, the human rights, the end of poverty, justice, world care, etc, etc
is there something from all that in those awful commercial moves ?

That's a load of nonsense. How have they deviated from their original aims?

Lancemc and Headache -

 

[yimou]

Interesting reading ,,,,

As long as U2 keeps putting out records and going on tour, then i dont give a f... about the money side of the band.. I dont consider them sell-outs at all.
Bono still cares, the band still rocks so whats the big deal about a commercial and knowing how to earn a few bucks

U2 is still " our " band,, They still play for you and me,, As long as you let them.

 

[innocent_eyes]

...Because Headache said it so well, i'll post it again!!!

Headache:
yea... you're all right. u2 are sell outs. bono really doesn't give a shit about anything but money anymore... yea... that's why it took 5 fricken years for a new album, 'cause bono was traveling all over the world "not giving a shit"

[/sarcasm]

-end quote!!!

oh, and I agree completely,lol !!!

 

[Dima]

oh yeah jick and U2 also control US politics...and they have a mind control project...come on be serious

#1 if the tour doesn't start they have to refund the tickets cause there's a thing called law..and if you don't trust law there's another one called "extremely bad spin" (aka end of a career...i don't think 15 million dollars is worth the end of a career if you're U2 and you can make 15 million $ with just 3 shows this summer in Europe)

#2 your statements about U2 purchasing reviews or media or awards are COMPLETELY immaginative...unless you have some proof of it...as i doubt we don't need you to share with us your "conspiracy for world domination theory"

#3 if U2 is milkin Apple dry...how can you justify the fact that HTDAAB or U2 related downloads broke every record in I-Tunes (short) history? and the fact that I-Tunes incomes dramatically improved from the moment U2 signed the deal with Apple? i don't think steve jobs became billionaire doing charity or signing stupid deals.
BTW U2's boxet is not the first boxet ever released by I-tunes...but you must have been blinded by your own non sense theory

 

[jick]

I love how so many people to try equate making money to not caring about anything anymore. Just because U2 have finally realized there's plenty of money to be made, doesn't mean they stand for any less than they ever did. If anything, having more money makes them even more powerful to fight for, as you stated, "human rights, end of poverty, justice, world care, etc, etc"

Exactly. Just because they make boatloads of cash doesn't mean they are sellouts - they are just smart.

Cheers,

J

 

[jick]

yea... you're all right. u2 are sell outs. bono really doesn't give a shit about anything but money anymore... yea... that's why it took 5 fricken years for a new album, 'cause bono was traveling all over the world "not giving a shit"

[/sarcasm]

Actually, there is some wisdom in your statements. Once artists are hot, record companies push and push them to record again and release an album within a year. Take Britney, in the past 6 years she has made more albums than U2. Avril released her debut album after ATYCLB and released her follow-up before HTDAAB. U2 were the "in-thing" with ATYCLB, especially after how their songs touched the 9/11 disaster, the Grammy push, and the Superbowl push. But since U2 are so rich and virtually control their record label, they have the luxury to record whenever they want so it take them much longer nowadays to record albums. For 80-84, U2 did four albums and 1 live EP. For 00-04, U2 only could do two albums. That's the luxury of being in their position and controlling media. They can take a four year break and still get so much hype. U2 are exempted by record company requirements to "ride the wave" or "keep on going while you're hot."

Cheers,

J

 

[jick]

I believe Paul McGuinness (sp) should get some of the credit as well, if not most of the credit.

Although the potential $4,000,000 from the U2.com membership drive is a lot of money in our eyes, in actuality, it is not enough to maintain a website like U2.com on a daily basis. Web maintenance, new content, and bandwidth will eat up that money within months. It's real expensive to run a quality website like U2.com.

Keep in mind my estimates were very conservative and its not like the number of members won't grow as the tour progresses.

Cheers,

J

 

[jick]

#2 your statements about U2 purchasing reviews or media or awards are COMPLETELY immaginative...unless you have some proof of it...as i doubt we don't need you to share with us your "conspiracy for world domination theory"

#3 if U2 is milkin Apple dry...how can you justify the fact that HTDAAB or U2 related downloads broke every record in I-Tunes (short) history? and the fact that I-Tunes incomes dramatically improved from the moment U2 signed the deal with Apple? i don't think steve jobs became billionaire doing charity or signing stupid deals.
BTW U2's boxet is not the first boxet ever released by I-tunes...but you must have been blinded by your own non sense theory

#2 U2 are all about world domination, and Bono has never been shy about it.

#3 I wasn't referring to the iTunes boxset. I was referring to the U2-themed iPod. U2 probably struck a lockout deal that for a given period, no other musical artist can have his/her own themed iPod. So all the iPod afficionados who want something different won't have any choice except to go for the U2 iPod becase it is the only alternative. That's what your call monopoly and U2 are smart businessmen to grab that opportunity.

Cheers,

J

 

[Souly]

I think you hit the nail on the head, jick. Good analysis.

 

[ponkine]

U2 missed the point . U2 have become a band with no principles, as a dissapointed fan said. Do you remember 80´s times ?... U2 sold records just with their music alone, unlike what´s happening now with all that marketing machine. As I posted on other site, just take a look at Led Zeppelin. Still they´re the third most succesful band from all times - after The Beatles and Pink Floyd - and they were very shy of cameras, TV shows, etc, even fewer interviews, promos,etc. Their relationship with the mass media - unlike U2 - was the worst. Every Led Zeppelin album was received so badly. They didn´t even want to release singles. Of course they hadn´t MTV nor web site, nor iPod nor magazines, etc. Even they released Led Zeppelin IV without any single word on the cover front nor cover back ( I´m talking about the original vinyl release on 1971 )

Neverthless they sold more copies than any other band... why ? because of their music and their concerts, THAT¨S ALL !! I mean, that´s the real spirit of the music.

They never said "it´s our best album and blah blah blah". Also they didn´t have to lie to their fans. That´s really something annoying from U2, I mean, they have been promising a "punk Rock" album since early 2000, by the time All That You Can´t Leave Behind was released. You can call any other person as a liar, but you can´t call U2 as liars, I don´t know why, because they actually have been lying since 2000

I want them to be a truly great band whom just want to make music again, not sell out bussinessmen trying to get as money as possible in any way anymore.

I hope you´ll get me right this time, I have good feelings

Peace

 

[Lancemc]

You may have good feelings, but you're wrong. U2 didn't lie. They WERE making a "punk/rock" album in the early 2000's. But things didn't mesh and they abandoned it in late 2003. Find me one article from 2004 where the band promices a punk rock album.

 

[Dima]

They never said "it´s our best album and blah blah blah". Also they didn´t have to lie to their fans. That´s really something annoying from U2, I mean, they have been promising a "punk Rock" album since early 2000, by the time All That You Can´t Leave Behind was released. You can call any other person as a liar, but you can´t call U2 as liars, I don´t know why, because they actually have been lying since 2000

I want them to be a truly great band whom just want to make music again, not sell out bussinessmen trying to get as money as possible in any way anymore.

I hope you´ll get me right this time, I have good feelings

Peace

cause you obviously know every statement Zep made to the press in seventies right? come on...

and just to know...do you realize that you can't compare the coverage that artists in the 70's benefited of is a minimal percentage of the massive coverage today's artists have with internet and hundreds of tv's (and with music related tv's that became a major factor)?
Market has changed a lot just in case you didn't know...now we have sites that report how many times a day Edge go to the toilet...back in the seventies you had only magazines and radio and even in the 80's MTV wasn't a real factor

BTW U2 ARE a great band: they make music..but nowadays you can't make money on albums and that's a fact: you have to do concerts and TV appearances...and if Zep came out in the 90's that's exactly what they'd do

 

[sallycinnamon78]

cause you obviously know every statement Zep made to the press in seventies right? come on...

and just to know...do you realize that you can't compare the coverage that artists in the 70's benefited of is a minimal percentage of the massive coverage today's artists have with internet and hundreds of tv's (and with music related tv's that became a major factor)?
Market has changed a lot just in case you didn't know...now we have sites that report how many times a day Edge go to the toilet...back in the seventies you had only magazines and radio and even in the 80's MTV wasn't a real factor

BTW U2 ARE a great band: they make music..but nowadays you can't make money on albums and that's a fact: you have to do concerts and TV appearances...and if Zep came out in the 90's that's exactly what they'd do

You know what? That's the most sensible comment I've heard today. Thankyou.

 

[Dima]

#2 U2 are all about world domination, and Bono has never been shy about it.

#3 I wasn't referring to the iTunes boxset. I was referring to the U2-themed iPod. U2 probably struck a lockout deal that for a given period, no other musical artist can have his/her own themed iPod. So all the iPod afficionados who want something different won't have any choice except to go for the U2 iPod becase it is the only alternative. That's what your call monopoly and U2 are smart businessmen to grab that opportunity.

Cheers,

J

#2 but not the way you tried to demonstrate...they are for world domination through their music and through their concerts

#3 didn't you think about the fact that if there was such an aggreement (what you call monopoly) probably is beacuse marketing experts from Apple thought that the demand for another artist's i-pod wouldn't justify the costs of the deal with those artists?...do you think that there are monkeys behind Apple's marketing chioces?

 

[ponkine]

Market has changed a lot just in case you didn't know...

for worse

U2 should rebel against that awful market instead

I still have good feelings, don´t get me wrong please

 

[sallycinnamon78]

glad to hear you have good feelings, ponk. We should all have good feelings.

 

[sallycinnamon78]

for worse

U2 should rebel against that awful market instead

I still have good feelings, don´t get me wrong please

How, pray, are they to rebel against the technology of the present and the future, without becoming obsolete??!

Like it or not, there is a need to adapt and move with the times. If we don't, we're left behind. Simple as.

 

[Dima]

for worse

U2 should rebel against that awful market instead

I still have good feelings, don´t get me wrong please

I understood the feeling under your comment

Anyway U2 are a POP band in the good sense of the word: they've always wanted to speak to as many people as possible (or actually to whoever wants to listen to what they've got to say: thei music was never intended to be elitarian)...just nowadays you can't pretend of speaking to people if you don't deal with media: the world has changed

P.S.
i undertand my english is terrible...i hope my point is clear though

 

[jick]

I want them to be a truly great band whom just want to make music again, not sell out bussinessmen trying to get as money as possible in any way anymore.

U2 are already a truly great band and they do make good music. Being a musician and a businessman aren't incompatible. At least they are better off than other artists who are ripped off by their managers with their royalties and who don't even own their songs. These artists have since gone bankrupt and even though they may have made decent music in the past, they are gone now due to lack of funds.

Always remember that the primary purpose of U2 being U2 is that it is a JOB to them. Even Bono introduces Mullen as the guy who gave him "our first jobs and keeps us in our first jobs." A job is for wage-earning, to feed the families. U2 never made music for the sake of art. Their objective was always to appeal to the most number. They always labelled themselves as popstars. U2 make music for money, but what's wrong with that? Ever notice that they are so concerned about making hits (see Clayton's quotes in the TIME magazine feature) just as Bono admitted to being concerned about bagging #1 in as many countries as possible.

If you look at the u2.com membership and the iPod deals, these are all just to increase U2's money. With more money, they have access to better technology in recording and distributing music. The best proof about U2's being smart businessmen is how they have kept their wealth to steadily increase. U2 aren't formally educated, they have no college education which puts them in the same boat as many athletes (boxers in particular). Many have gone bankrupt because they were ripped off by their agents or milked dry. Ever see the ocassional TV feature about "former athletes: where are they now?"? Well, I think you get my point.

U2 are smart and they use this smartness to maximize profits. U2 can be as rich as they want to be but as long as they make great accessible pop music then that is all that matters. I don't think there is anyone here who will dispute the premise that their latest album, HTDAAB, is great ear candy.

Music and business are compatible and U2 are living proof of that.

Cheers,

J

 

[Sleep Over Jack]

for worse

U2 should rebel against that awful market instead

I still have good feelings, don´t get me wrong please

How do you feel about the fact that Led Zeppelin have allowed their songs to be used in car adverts!?? yeah, thats really keeping it real...

 

[jick]

How do you feel about the fact that Led Zeppelin have allowed their songs to be used in car adverts!?? yeah, thats really keeping it real...

U2 allgedly turned down $2 million to lend Where The Streets Have No Name to a car commercial. I think that means a lot to all the fans that U2 would never "cheapen" their image. But U2 invest so much into their image that $2million isn't enough money to sell out. Hell, they can even make an easy $2 million just on website membership alone so they don't really care.

Cheers,

J

 

[Dima]

U2 are already a truly great band and they do make good music. Being a musician and a businessman aren't incompatible. At least they are better off than other artists who are ripped off by their managers with their royalties and who don't even own their songs. These artists have since gone bankrupt and even though they may have made decent music in the past, they are gone now due to lack of funds.

Always remember that the primary purpose of U2 being U2 is that it is a JOB to them. Even Bono introduces Mullen as the guy who gave him "our first jobs and keeps us in our first jobs." A job is for wage-earning, to feed the families. U2 never made music for the sake of art. Their objective was always to appeal to the most number. They always labelled themselves as popstars. U2 make music for money, but what's wrong with that? Ever notice that they are so concerned about making hits (see Clayton's quotes in the TIME magazine feature) just as Bono admitted to being concerned about bagging #1 in as many countries as possible.

If you look at the u2.com membership and the iPod deals, these are all just to increase U2's money. With more money, they have access to better technology in recording and distributing music. The best proof about U2's being smart businessmen is how they have kept their wealth to steadily increase. U2 aren't formally educated, they have no college education which puts them in the same boat as many athletes (boxers in particular). Many have gone bankrupt because they were ripped off by their agents or milked dry. Ever see the ocassional TV feature about "former athletes: where are they now?"? Well, I think you get my point.

U2 are smart and they use this smartness to maximize profits. U2 can be as rich as they want to be but as long as they make great accessible pop music then that is all that matters. I don't think there is anyone here who will dispute the premise that their latest album, HTDAAB, is great ear candy.

Music and business are compatible and U2 are living proof of that.

Cheers,

J

you always miss the first half of the matter: you alway say that U2 make money...ok, that's true but who's giving them money? and why they are giving money to U2 with all the bands on the market? do you believe it's all due to marketing? so U2 sell out their concerts because of marketing? So U2 win constantly poll and prizes all over the world because of marketing? I think that the real reason is that they created through the year a unique link with the audience offering them year after year great music and great concerts...you cant' last 25 years and still remain relevant in the sense that people still expect from you NEW music and not just your OLD hits (as for instance happens for RS) and in the sense that your new album is THE musical event of the year any given year if not for the fact that you've have always created music with a soul: every big phenomenon lasted a few seasons and then passed away while U2 from the moment they arrived then they've never left...is it all marketing?

And again: Why Apple chose U2 and not another band? they're huge but not the biggest act in the world...are you sure that the fact that U2 are generally renewed for making "music that really matters" and one of the few act in history that for a time were the "mouth of a generation" wasn't taken in count when Steve Jobs chosed the act to link their image to? U2 marketing staff could be great but they don't make miracles: if you don't have an image of true artists behind you to sell to the world you wouldn't get such a deal nowadays...and you can't build that image if you don't make music that lasts year after year, you can't build that image only with marketing: marketing can sell that image but can't create anything that big..and that's what you miss in you theory: the starting point.